Seeking a socially responsible small cap

June 19, 2000

By Guy Halverson

Q I am 42, divorced and childless. I have a Roth IRA in addition to a deferred-compensation fund and a retirement plan. My Roth IRA is currently in Berger Small Company Growth Fund, but I am planning to move it to a socially responsible aggressive fund, preferably a small company fund that screens out defense, biotechnology, tobacco, and alcohol companies. Is it prudent to have my IRA in a small-company fund? Are you aware of any socially responsible ones?

E.S., Columbus, Ohio

A "The issue is not whether you have a certain number of types of securities within a single fund, but how well your overall portfolio, including your retirement accounts, is diversified," says Lewis J. Altfest, who heads up financial firm L.J. Altfest &amp; Company.

He recommends you not have more than 10 percent of your assets in any one fund. Assuming your single-fund IRA is not over 10 percent of all your stock assets, he says using a small-cap growth fund is OK. He likes Amana Growth Fund, a small-cap fund that adheres to Islamic principles (800-728-8762). Other socially responsible fund groups to consider are Parnassus, (800-999-3505), Citizens (800-223-7010), Domini (800-762-6814), and American Trust (800-385-7003).

Q In the May 22 issue, you cited a Social Security spokesperson who pointed out that signing up for Medicare and seeking S.S. benefits were separate issues. But isn't a person who receives S.S. benefits before age 65 automatically signed up for Medicare at 65?

AYou are correct. Still, there are two ways to enter the Medicare system: being enrolled automatically, or applying.

According to a Social Security spokesperson, you are enrolled automatically if you are not yet age 65, but are already receiving S.S. or Railroad Retirement Board benefits. A person is also automatically enrolled if he or she is disabled and has been receiving disability benefits under S.S. or the Railroad Retirement Board for 24 months.

In the example cited May 22, the individual was still working past age 65, and had not yet signed up for Medicare or Social Security. So that person needed to apply. Those seeking S.S. or Railroad Board benefits should apply three months before the month they turn 65, the spokesperson says.

Questions about finances? Write:

Guy Halverson

The Christian Science Monitor

500 Fifth Ave., Suite 1845

New York, NY 10110

E-mail: halversong@csps.com

(c) Copyright 2000. The Christian Science Publishing Society

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